While it certainly helps to start your business with some money, you don’t have to wait until you have saved enough cash. In fact, you can even start your business with little to no money.
First, let’s talk about generating some money, and then we’ll discuss how to use that seed capital to find investors so that you can get the funding you need to grow your business at a faster rate. Essentially, then, after you prove your business idea, use the money you’ve generated through your efforts to find investors.
To persuade investors, you’ll need to create a formal business plan based on your experience. In other words, you’ll back-engineer the business building process that you figured out through trial and error so that you can explain it to someone else. Then, once you have your business plan, you’ll need to promote that idea via professional video marketing and other media. For example, you could use this video on a crowdfunding site to raise money from a large number of people or use it as part of your presentation when you meet investors in person.
Raising Seed Money
If you have no money, then you can use creative thinking and sweat equity to generate some cash flow.
Here are some guidelines:
1. In the beginning, work alone so that you can do everything your own way and at your own pace. You can partner up with others later on if you like. Also, don’t put pressure on yourself by hiring employees, promising to pay them on a commission basis.
2. Choose a business model, like, say drop shipping, where you can pay suppliers after you have received orders.
3. Learn everything you can about the business model. Numerous free tutorials are available online, like long-form blog posts, YouTube videos, and MOOC classes.
4. Once you understand how the business works, focus on being as efficient as possible. Besides creating a realistic schedule and establishing a fast-paced workflow, get low-cost hosting for your website, use a website builder to build your own website, create some social media profiles for your business, and sign up for B2B services that either have a free version or offer trial offers before you pay the subscription fees.
5. Document all the steps you have taken. You will need this for the next step.
Finding Investors
Let’s assume you now have some cash-flow. Your next step is to attract investors. Since you have created some revenue from your business idea, you’ve proved your business concept. You’ve found a viable business model, selected the right audience and products, and established that there is a market. You’ve also created a business process that delivers results. Now, all you need to do is find someone to finance your business so that you can scale up. What investors are looking for is someone who has a good idea that works. You’ve done this on a small-scale.
To convince investors, build a business plan to explain your business idea and create a professional video to attract their attention.
1. Business Plan
How do you create a business plan? You can find out how by using the SBA’s Business Plan Tool These tools will walk you through the process of creating an executive summary, business description, market analysis, organization management, sales strategies, funding requirements, and financial projections.
2. Create a Professional Video
Even if you do know how to make your own videos, it’s a good idea to work with professionals who will help you with every aspect of creating a high quality, persuasive video to attract attention to your business idea. The idea of the video is not to simply convey the ideas in your business plan by explaining your ideas on camera and showing slides of statistical information when relevant. Professionals can offer ways for spicing up the images and visual story to better catch and keep the viewer’s attention.
Here are some ideas on how to script your video.
1. Share your story. Talk about how you came up with the idea, researched it, experimented with different ideas, and finally isolated the ones that worked and eliminated the rest. Then talk about how you refined your proven ideas until your business generated a small profit.
2. Provide an overview of your business idea. Explain why it provides value, ask for what you need, and realistically project the future of your business based on your knowledge, experience, and research findings.
In closing, it’s essential that you only pitch the right investors—people who have an innate interest in your market, who have the money to invest without hesitation, and who are willing to work with a startup entrepreneur rather than insist on only working with a business person with a proven track record. Stay strong, persist, and you will find someone or a group of people who will love your business idea.
